This the latest installment of our Q&A Series – short interviews with talented, experienced, and successful entrepreneurs who are on the front lines of running online businesses. I’ve always believed that it’s a big mistake to not at least listen to those who have worn the same shoes that we are putting on every day. I hope these interviews prove to be as informative to you as they have been for me.
Today’s guest is Elizabeth Pitt, CEO of CareGiverNeeded.com. I had a chance to sit down with Elizabeth recently. She’s extremely bright and has some really valuable insights on starting a business for the first time, acquiring traffic, and the importance of learning as you grow.
B5: Talk a little bit about what CareGiverNeeded.com is all about.
EP: CaregiverNeeded.com is the fastest and easiest way to find senior in-home care on-line. We have thousands of in-home senior caregivers on our site, and hundreds of in-home care agencies, so when a family is looking for care, we are an ideal resource. We answer a lot of questions families have about home care on the site, and we have experienced caregivers on staff to answer questions live.
B5: How do you make money?
EP: We make money from subscribers who pay to see all the contact information for caregivers, and from home-care agencies who pay to be in front of families who need care. We also make money from Google ads embedded in the content on our site.
B5: How long has CareGiverNeeded.com been in business? And how long have you been associated with it?
EP: The company has been in business since 2005. I’ve owned it since May 2009.
B5: What’s your experience with the company been like so far?
EP: Buying a business has been an amazing and life-changing process. To go from an employee in a company to a 100% shareholder requires such growth and such a shift in mindset. I had to make that shift quickly, and I am still making it. I’ve had some tremendous successes, and more than a few surprises. But for 9 months into the business, we’re doing well.
B5: Tell us about the most valuable learning experience(s) you’ve had since taking over the business.
EP: There are quite a few lessons I’ve learned so far, including:
1. Whatever you think you need in cash and time to get the business humming, double it. If you started your own business, you are by nature optimistic. You think that things will go better than planned and cost less than planned. You are wrong. New things are uncertain. Your business will eat up more time, money and energy than you could ever think possible.
2. Invest in your education. You just can’t be an effective owner of a business that’s web based until you have a firm grasp on internet technology and search engine basics. Find mentors, seminars, courses, books and educate yourself about SEO/SEM, web technology, your industry, finance/investing, and sales and marketing. You may have learned all this in business school, but take the time to refresh, and do it from the perspective of a small business owner. You will never regret an investment in yourself.
3. Vendors who are selling you things have very different incentives than employees you may have worked with when you had a J-O-B. Make sure the money follows their performance. Pay as little as possible up front, make no progress payments, pay the most at the end, and reserve a little in case they screwed up so that they have an incentive to fix it. Or, if feasible, set up a small, test project or pay for some hourly consulting to test the waters first. I don’t mean to be cynical…it’s just that incentives are different in the free market than in the corporate world.
B5: Is CareGiverNeeded.com backed by any investors, or is it bootstrapped? Bootstrapped. Can you talk a little about why you took the company in that direction?
EP: I purchased an existing business to reduce some of the risk – the value proposition has already been proven, and it just needs to be tweaked here and there to grow/become more profitable. I had the financial wherewithal to finance that stage of the business, so it made more sense to keep control/ownership to get started. We are investing in tests to find growth levers, and if we find a way to make the business really take off (but that will probably suck up cash in the process), it will be an appropriate time to take on an investor. The fiduciary responsibility of outside cash is non-trivial, and I want to take it on when I have a clear picture of how it will benefit the company.
B5: Your company doesn’t offer any physical products or have any physical locations. What’s unique about running an online pureplay?
EP: It can be hard for others to understand your business…bankers/investors, customers, advertisers…because as much as people use the Internet, it can still be hard to grasp Internet business models. Also, you must, as the chief executive of the company, have a deep understanding of all the web levers. This can’t be under-emphasized. Though my business is in senior in-home care, so I have to know as much as possible about that subject and the competitors/partners who offer similar products for the same customer need. When it’s a pure play, knowing as much as possible about the Internet as a sales channel is imperative. You can’t outsource it. It is a huge part of what the business is about.
B5: How much of your marketing strategy is organic search versus PPC?
EP: 100% organic. We are testing PPC campaigns now.
B5: What can you tell us about your strategy for each?
EP: They are complementary strategies.
Before even looking at organic vs. paid, you need to diligently think through your macro search strategy. To win in any business, you need to solve an important problem or fulfill a need. In the world of search, you must understand what need your product/service meets for customers, and what words they would type into a search bar to get that need met. More specifically, what words are they typing in when they are just doing research vs. when they are ready to pull their credit card out and make a purchase? How do you want to interact with them during their search and buy process? What words and terms let them know that your product/service is a perfect match for what they are looking for? Once you do the research to understand that, you need to filter by the territory your competitors may have already staked out. Is there someone who’s already optimized for a lot of the terms you want? Or are competitors paying an arm and a leg to buy certain terms at prices that could never be profitable for you? If so, what terms are still good for you, but not already dominated by another player? Or, are there multiple, lower volume terms that you could focus on that competitors aren’t focused on today? The result of this analysis would be your “keyword strategy”, and then you can start to think about organic vs. paid.
I think about organic as the core, bread and butter, what you want to be known for set of keywords, and also the words more aligned when someone is doing research to get them to land on your site so that you can convert them to paying customers downstream with a good user experience. I think of paid as the set of keywords that mean someone is really close to buying, really teed up and ready to go, and you grab them and convert them. I also think of paid as a way to test out a new set of keywords or marketing messages that you think might appeal to customers, but you’re not quite sure. You can get good quick and dirty feedback on an idea/concept/marketing message with paid search.
B5: What tips can you share with our readers about traffic acquisition? What have you learned that you didn’t know when you started the business?
EP: With traffic acquisition, there are the basics, and then there are the new/cutting edge strategies. You need to have your basics in place before you get creative. You need the right tags, the right indexing in Google, the right page tracking. If you don’t have the basics covered, trying all the buzz-filled techniques of the day are a waste of time. And the basics can be hard to get completely covered. If you think you’re close, find an mentor/expert/specialty firm in search to give you the once over and help you tweak. (Finding good help takes a lot of work, by the way) Once your basics are covered, then figure out some of the techniques to give you extra “juice”. This depends on your business. It might be to focus regionally and have a way to get regional searches to your site. It might be to start a blog, or start publishing video content. It might be to create “feeder” sites on similar, complementary topics that can get clicks to your site.
B5: What are CareGiverNeeded.com’s plans for the future?
EP: Right now, the business is cash flowing and profitable! The next phase is growth. We are exploring whether we have some good levers to pull for growth that will add value to our customers, that we will deliver and fulfill to the level of their expectations, and with which we can be profitable. But we are keeping our eye on the core business and making sure it runs well before heading off in too many other directions.